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What’s the difference between a master and a normal franchise?
A master franchise normally comes about when a franchisor takes their business to another country. Here are some definitions of the various parties involved, which will hopefully help you. The franchisor is the company that originally developed the concept that is to be franchised and which will appoint master or unit franchisees in an overseas territory. A master franchisee is the entity to whom the rights to use the concept are granted for them to operate in their own country (or possibly part of a country where geography allows). They will probably operate their own company-owned outlets in order to prove and/or adapt the system, but they will sooner or later appoint subfranchisees to open additional units. The sub-franchisee is the individual or company that owns and operates the trading outlets that report to the master franchisee in a given country or territory. Their reporting responsibility, and their legal agreement, will normally be with the master franchisee, not the franchisor. In effect, a master franchisee becomes the franchisor for his territory and is responsible for recruiting and training his own franchisees, whereas in what you call a normal franchise the franchisee simply runs the outlet delivering the product or service.
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